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Attack on Austrian Apriorism Refuted

Today there was a most unfortunate post at Bleeding Heart Libertarians that attacked “extreme apriorism” among Austrian economists. The attack was focused on an unnamed “Austrian Dude,” but Mises’ own position is nowhere explained or clarified as a counterpoint — one suspects that Mises, too, is an “extreme apriorist.”

I asked Jeffrey Herbener, department chairman at Grove City College and the professor for our Austrian economics course here, to reply:

Anti-Extreme-Austrian-Apriorism as the Straw Man Fallacy

At Bleeding Heart Libertarians, Jason Brennan dismisses Ludwig von Mises’s view of a priori knowledge by reducing it to a statement from the mouth of “Austrian Dude” about a distinction between action and behavior. What Mises himself claimed is that one can know something about human action without learning it from experience. The conceptual framework by which we understand the meaning of human action is known a priori. The concepts of ends and means, for example, are part of the categorical structure of the mind, Mises claimed, which is itself a requisite of understanding the movements that one observes in himself and others as human action, i.e., an attempt to attain ends by using means.

Because each person possesses a human mind with the same categorical structure, the a priori knowledge about human action that one can learn is universal. It is true for any and all human action. Knowledge about human action learned by experience is contingent on the person, place, time, and circumstances of the action. For Mises, then, the relevant distinction is between universal knowledge of human action and contingent knowledge.
Mises called the realm of universal knowledge “economic theory” and the realm that blends together universal and contingent knowledge “economic history.”

Mainstream economists reject Mises’s distinction and instead consider “economic theory” a formal model which generates testable hypotheses. The hypotheses of a superior theory are not often rejected while the hypotheses of an inferior theory are too often rejected. Behavioral economists have been pointing out to neoclassical economists that some of the hypotheses of their models, models which postulate “rational economic agents,” are being too often rejected. To correct this flaw, behavioral economists have postulate models with “less than fully rational economic agents.”

Whatever one thinks of this sectarian squabble within the mainstream, it has nothing to do with economic theory as Mises thought of it. The universal features about human action stand regardless of its contingent aspects. Whether a person chooses “rationally” in the neoclassical sense or “less than rationally” in the behavioral sense, in a human action the person chooses. Choice is a universal feature of human action.

It is no mark against the Misesian conception of economic theory that it does not address the contingent features of human action. That’s the task of economic history.

Live Q&A Today!

We’ve sent out a couple of emails to Liberty Classroom members about today’s live session, but for the sake of completeness we’re posting here as well. The time — 2:30pm ET, for one hour — may seem a little odd, but it’s intended to make it easier for our international subscribers to join us for this session. Gerard Casey, the libertarian philosopher who teaches our logic course, will be joining me. Bring your questions or just come and watch.

To join us, sign in to your account around 2:30pm ET, and click on the “Live Sessions” link you’ll see at the top of the screen. Or, once signed in, simply click here.

John Maynard Keynes: His System and Its Fallacies

Our new course is up! The lectures are ready to be streamed or downloaded. Check it out, and join us tomorrow (Wednesday) night for a special live Q&A session with the professor, the rising Austrian star GP Manish.

Here’s what the course looks like:

  1. A Few Fundamental Economic Concepts
  2. The Production Structure and the Order of Goods
  3. The Calculation of GDP: The Income Method (Part 1)
  4. The Calculation of GDP: The Income Method (Part 2)
  5. The Calculation of GDP: The Expenditure and Output Methods
  6. Inventories and the Measurement of GDP
  7. The Conceptual Foundations of GDP Measurement
  8. The Calculation of GDP with Durable Capital Goods
  9. Depreciation and GDP
  10. Nominal and Real GDP
  11. The Circular Flow of Income and Expenditure: An Introduction
  12. The Circular Flow with Durable Capital Goods
  13. The Circular Flow with Inventories
  14. Equilibrium and Disequilibrium Levels of GDP: An Introduction
  15. Equilibrium and Disequilibrium Levels of GDP: Further Explorations
  16. Price Rigidity, Price Flexibility and Equilibrium GDP
  17. Keynes’ Theory of Consumption Expenditure: The Fundamental Principles
  18. Keynes’ Theory of Consumption Expenditure: Implications for Equilibrium GDP
  19. Consumption Expenditure and Equilibrium GDP with Durable Capital Goods
  20. The Determinants of Investment Expenditure (Part 1)
  21. The Determinants of Investment Expenditure (Part 2)
  22. Aggregate Investment Expenditure and the Rate of Interest
  23. Expectations and Investment Expenditure
  24. The Demand for Money: An Introduction
  25. The Speculative Demand for Money
  26. Interest Rate Determination and the Level of Employment
  27. Unemployment in the Keynesian System
  28. The Keynesian Multiplier and Monetary and Fiscal Stimulus
  29. Consumption Expenditure and Savings in the Keynesian System
  30. The Role of Time in Production and the Maintenance of Capital: The Austrian Perspective
  31. The Keynesian Denigration of Savings: A Critique (Part 1)
  32. The Keynesian Denigration of Savings: A Critique (Part 2)

If you haven’t yet joined us, now’s a great time. Learn the history and economics they didn’t teach you, from professors you can trust, while driving your car. Plus, ask questions in our forums! Here’s more.

Next Live Session Coming Up!

Our next live Q&A session will take place Wednesday night, August 28, at 8:00pm ET for 90 minutes. I’ll be joined by our economists: Jeffrey Herbener, department chairman at Grove City College, and the newest addition to our Liberty Classroom faculty, G.P. Manish of Troy University. His course on Keynesianism will be added to the site tomorrow (members, watch for an announcement in your inboxes!).

Please join us! Just sign in to your account and click “Live Sessions” at the top of the screen. Or, once signed in, simply click on this link. Bring your questions or just come and watch!

The Wisdom of Raoul Berger

Both Kevin Gutzman and I have offered a substantial reading list for our constitutional history course at Liberty Classroom, but for those who have not had the time to delve into some of the volumes, I thought I would offer a few quotations from two of the books I recommended for the course, both by Raoul Berger. Berger was arguably the most important and misunderstood legal scholar of the late twentieth century. The left loved him during Watergate, but they could not understand how his withering assault on executive privilege could mesh with his equally devastating attack on the Earl Warren Court and the incorporation of the 14th Amendment during the Civil Rights era. Berger disliked modern political labels and vigorously denied he was either a liberal or a conservative. Rather, he was what I call an American traditionalist in favor of the federal republic of the founding generation, a republican in the Jeffersonian mold. Most important, Berger was a real scholar.

His books are hard to find and often pricey, but many academic libraries still carry several of his works, and they are a must read for anyone interested in an originalist perspective. Let these few remarks serve to whet your appetite.

From Executive Privilege: A Constitutional Myth:

“Executive privilege—the President’s claim of constitutional authority to withhold information from Congress—is a myth.”

“Impeachment [of the President] lies for corruption, bribery, and other high misdemeanors, and, as Blackstone stated, for action contrary to law, as well as subversion of the Constitution, that is, usurpation of power.” (I am partial to this quote. I stated in my Founding Fathers Guide to the Constitution that every President in the 20th century should have been impeached.)

“Each generation tends to read history in the focus of its own preoccupations; each thinks that it enjoys a special vantage point. So it is that a contemporary re-evaluation of the protracted information-withholding controversy inevitably is colored by the extraordinary events of our time. Secret executive agreements that make commitments of unknown magnitude; presidential warmaking and bombing hooded in secrecy; escalation by stealth in Vietnam in the teeth of bleak intelligence estimates not disclosed to the nation; ‘White House Horrors’—the words are those of John Mitchell, former partner and Attorney General of President Nixon—spreading a miasma of encroachments on individual rights. These events have confirmed Patrick Henry’s warning that secrecy in government is an ‘abomination’; it is a main instrument in the corruption and arrogation of power. If the nation has not relearned that lesson from the secret escalation in Vietnam, from the bold attempt to corrupt the electoral process that surfaced in Watergate, it is unteachable.” (Written in 1974; has anything changed?)

From Government by Judiciary: The Transformation of the Fourteenth Amendment:

“Historically the citizenry have relied upon the States for protection, and such protection was afforded before the Constitutional Convention by a Bill of Rights in virtually every state Constitution. It was not fear of State misgovernment but distrust of the remote federal newcomer that fueled the demand for a federal Bill of Rights which would supply the same protections against the federal government that State Constitutions already provided against the States.”

“To ‘interpret’ the Amendment in diametrical opposition to that intention is to rewrite the Constitution.”

“The nation cannot afford to countenance a gap between word and deed on the part of the highest tribunal, a tribunal regarded by some as the ‘national conscience.’ It should not tolerate the spectacle of a Court that pretends to apply constitutional mandates while in fact revising them in accord with the preference of a majority of the Justices who seek to impose their will on the nation….‘The people,’ in the words of five early State Constitutions, ‘have a right to require of their…magistrates an exact and constant observance’ of the ‘fundamental principles of the Constitution.’ Among the most fundamental is the exclusion of the judiciary from policymaking.”

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